6 steps toward a financial fresh start
Picture this: 9:30p.m. on a Thursday evening in late June 0f 2009. Four fans are running, creating a hum so loud I can’t hear myself think, and doing very little to cool the stifling room.
It is 90 degrees inside my house.
I’m nursing the baby and we’re both drenched in sweat.
Two of my children are sick and sad with the chickenpox, tossing and turning on the small mattress we’ve set in front of the window for them to sleep on. They are uncomfortable from the heat and the itch.
The air conditioning is broken, we don’t have enough money to cover the cost of the repairs, and we are just one more disaster away from the breaking point.
My whole family is sad, tired, and miserable.
We needed a financial fresh start and we needed it now. And, the only way to make that happen was to give it to ourselves; no one was going to come along and rescue us or bail us out. We had made this mess and we needed to get ourselves out of it.
Have you ever been in a bad financial situation like this? Have you lost sleep over money?
Or maybe you aren’t in dire straits, but you’re still feeling a pinch in your pocketbook. I think we all need to take a look at our money matters from time to time, and do a bit of tidying up.
Do you need a fresh start?
I’m not an expert, but here are some things that finally worked for us after years of making mistakes.
1. Face the facts.
To start, we wrote down every penny we spent. We couldn’t figure out which holes to plug in our sinking ship until we knew which were leaking the most water.
If your minivan payment is more than you can afford or your grocery budget is unrealistic, numbers won’t lie.
2. Don’t point fingers or play the blame game.
I can’t say it enough: get on the same page when it comes to your money and don’t waste time or energy blaming each other.
Our marriage isn’t perfect, but I do know that Christopher and I didn’t start making real progress until we stopped fighting about money and starting working together to fix our problems.
3. Honestly evaluate your financial priorities.
After you write down where you’re spending your money, it might surprise you. In our case, our spending wasn’t matching up with how we wanted to live.
It was a classic example of saying one thing, but doing another.
So, we re-set our priorities:
- Starting with paying our bills (mortgage, utilities), making our first goal catching up on anything we were behind on,
- then paying our debts (minimum payments at that point),
- and then figuring out how to live on what was left (essentials only).
4. Learn to say no to yourself.
In our case, we were making enough to pay our bills and pay down our debt, but our spending was way out of control. We had to make some radical changes to our daily lives and exercise self-discipline.
It was intimidating, but together we brainstormed some ways to make it work.
I’ve talked about this more in depth here, but for us this looked like:
• Buying nothing new OR used. Non-essentials couldn’t be justified at first, even second-hand.
• Later, once we were on more solid financial ground, we adopted the motto of “make do, do without, or DIY,” and when those choices were exhausted, we sought out secondhand items to meet our clothing, furniture, and household needs.
• We ate simple food. We ate what we could afford, not necessarily local or organic.
• We said no to social events that required a gift and/or the expense of travel. A note expressing our best wishes was sent instead. This upset a few people, but most were very understanding. You’d be surprised how many people are also experiencing a hard time financially but just don’t talk about it.
• We became a one vehicle family. This took some getting used to, and understandably might not work for everyone, but dropping that extra car payment was a saving grace for us and any inconvenience was worth the savings.
5. Remind yourself of your goals, big and little.
If you’re married, make sure you’re on the same page, check in with each other often. Have regular budget meetings, talk about purchases, and go over your goals.
Celebrate those financial victories!
6. Keep working on the next step.
Life is going to happen, issues will come up. Open lines of communication and those “what if?” conversations help you work out a back-up plan for your back-up plan, which helps you sleep better at night.
Keep thinking about that next debt to pay down, that extra dollar you can save, any potential money pitfalls you can avoid or mistakes you can fix.
Keep your eyes and ears open for ways you can give, too. No matter how bad your situation, there is someone out there who has less than you do. You probably have excess in your life in some area. How can you use that to bless someone else?
So, there you have it friends—the six things that have helped us when we needed a financial fresh start.
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